The Role of Consumer Copayments for Health Care: Lessons From the RAND Health Insurance Experiment and Beyond

The appropriate level of cost-sharing for patients remains a key issue in designing both private and public health insurance. This report reviews the groundbreaking RAND Health Insurance Experiment from the 1970s to offer insights into current policy debates about appropriate cost-sharing levels.

One of the most ambitious health policy studies in U.S. history, the RAND experiment randomly assigned thousands of families to insurance with varying levels of patient co-insurance. The researchers followed the participants for three to five years to evaluate the effects on their medical utilization and health status.

The new report, prepared for the Kaiser Family Foundation by Jonathan Gruber, Ph.D., of the Massachusetts Institute of Technology, examines the RAND experiment and other more recent research for lessons relevant to today’s policy debates.